Capital Report - Interview

SHOW: Capital Report (9:00 PM ET) - CNBC

HEADLINE: Senator Charles Grassley of Iowa discusses the bipartisan plan to help senior citizens afford prescription drugs

ANCHORS: GLORIA BORGER; ALAN MURRAY; Unidentified Anchor: Coming up on "The News" at the top of the hour

BODY:
GLORIA BORGER, co-host:

Welcome back.

Big breakthrough in the US Senate today, a bipartisan plan to help senior citizens buy their prescription drugs. With support from both parties, the new plan greatly increases the likelihood that Congress will at last enact a drug benefit.

Now here's a quick look at the details: Seniors pay for the first $275 a year; the government pays 50 percent of drug costs up to $3,450; the government pays 90 percent of the drug costs over $5,300.

Our next guest is one of the architects of the plan, Senate Finance Chairman Charles Grassley, who joins us tonight from Capitol Hill.

Welcome to CAPITAL REPORT, Senator. Thanks for being with us.

Senator CHARLES GRASSLEY (Republican, Iowa; Chairman, Senate Finance Committee): Gla--Gloria, glad to be with you.

BORGER: That's a little complicated what I was just reading over there. But can you tell us very simply do you have enough Democratic support to get this bill through the Congress?

Sen. GRASSLEY: We're going to have a lot of Democratic support, and I wouldn't even want to claim that we're going to have 100 percent Republican support, and really we've got the building, though, of a--a coalition that will be enough votes to pass it. Particularly, we've been hearing rumors that there will not be a Democrat filibuster against it.

BORGER: But...

Sen. GRASSLEY: That--that's the best news. So 51 votes should pass the bill.

ALAN MURRAY, co-host:

Well, now Senator Daschle came out criticizing the plan today, but you think he's not going to lead a filibuster effort or--or allow a filibuster effort against it?

Sen. GRASSLEY: I don't think he will. I've heard that. I haven't talked to Senator Daschle. I hope he doesn't.

We've been working on this issue for five years now, and I think that now's the time to do it. As Senator Baucus has said, the stars have kind of come together, and now's the time to act. We have the president very much engaged...

BORGER: Well...

Sen. GRASSLEY: ...in supporting the amount of money, and we have the president telling us that he's willing to pend--spend political capital on it.

BORGER: Well, Sen--Senator Grassley, is the president actually going to support this bill? Because, of course, it's very different from his own prescription drug plan...

Sen. GRASSLEY: They...

BORGER: ...that he was talking about just a month ago.

Sen. GRASSLEY: They have not said that they will support it, but they gave a very positive reaction to it an--after our news conference this afternoon.

BORGER: What does that mean...

MURRAY: Now...

BORGER: ...a 'positive reaction'? I--I...

Sen. GRASSLEY: Well, a very positive reaction that they want to move the process along and they would--they want to work with us, maybe making some changes. There may be some changes...

MURRAY: Yeah.

Sen. GRASSLEY: ...we can make for the White House. But even if this outline that we've put out today would reach the president as a final product of both the House and Senate, I would doubt seriously that the president would veto it.

MURRAY: Now the big difference between this plan and the president's plan is that--is that the president wanted to give a bigger benefit to people who moved into the--to seniors who moved into these private plans to create more competition in Medicare, hoping that that over time would hold down prices. Why were you against that?

Sen. GRASSLEY: For two reasons. Number one, I happen to believe that we should give our senior citizens maximum choice. And for those that want to stay in current Medicare, they shouldn't be denied a prescription drug benefit because of it. And on the other hand, I believe that the proposals--the--the new pro--proposal we're putting out for Medicare along the lines of what the president suggested, but more importantly along the lines of what federal employees have and congressmen have, will be so attractive to baby boomers because it's closer than current Medicare to what baby boomers have now in the workplace, and so I think people are going to gravitate there without being forced there for prescription drugs.

MURRAY: Well, you know, you've got to hope so, Senator, because, as you know as--as well as anyone, the costs of the Medicare program are going through the roof. I mean, there are projections out there that will show the government expenses for Medicare will eat up half of--of the current federal budget in a--in a--in a decade or two when all the baby boomers retire.

Sen. GRASSLEY: No. No.

MURRAY: There's nothing in here to control prices, is there, or to control costs?

Sen. GRASSLEY: Yes. Yes, there are things in there to control price, and it's the competitive bidding of the various plans against the pharmaceutical companies that are going to drive down the cost of drugs. It's a market approach. We're not going to have a government-regulated price of--of prescription drugs--we shouldn't do that--because that's going to cause shortages. But we're going to have the marketplace and the competition drive down the price.

BORGER: Well, Senator Charles Grassley, chairman of the Finance Committee, it's been a big day for you today. Thanks so much for being with us.

Sen. GRASSLEY: Thank you.